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Friday, January 30, 2015

from Lawrence, SUNDAY PhiloMadrid meeting at 6:30pm: How useful is competition? + News

Dear Friends,

This Sunday we are discussing: How useful is competition?

I guess that it is a universal truth than during a deep recession and
austerity nothing is sacred including the holy of holies we call
competition. Although I am not totally convinced that what we have today
is a real recession what is clear is that we have to be careful when we
try to figure out who is the enemy.

Before you get to the link to Ruel's and my essay please have a look at
the forthcoming visits to the British Cemetery in Madrid.

-----visits to the British Cemetery in Madrid
Redacto el present mensaje tanto en español como en inglés con el objeto
de comunicarles el programa de las visitas guiadas los sábados por la
mañana a las 11,00 hora.
Tomen nota de nuestra página web <www.britishcemeterymadrid.com> donde
aparece la dirección. La estación de Metro más cercana es la de URGEL,
línea 5, salida c/ Peñafiel y se encuentra en las rutas de buses 34, 35,
118 y 119.
I am writing this note both in English and in Spanish to provide the
programme of Saturday morning guided visits all of which take place at
11,00 a.m.
Please take note of our website < www.britishcemeterymadrid.com> for
details of the Cemetery location. Arrival by public transport is by
Metro, line 5, URGEL, exit marked c/ Peñafiel or by buses 34, 35, 118
and 119.

Saturday, 7th February - visit in Spanish
Sábado 7 de febrero - visita en español
Saturday, 14th February - visit in English
Sábado 14 de febrero - visita en inglés
Saturday, 28th February - visit in Spanish
Sábado 28 de febrero - visita en español

Si prefiere otra fecha y siempre que se reúna un grupo de 8 personas
como mínimo, avíseme para convenir una fecha.
If you would like a visit on another date and you can form a group of 8
persons or more, let me know so that we can come to an arrangement.

David Butler
----------


Hello Lawrence,
...... I'd like to share an old article I wrote more than ten years ago
(
https://ruelfpepa.wordpress.com/2015/01/29/the-ethics-of-competition-in-business-a-perspectivist-approach/
) which could in some ways be related/connected to the topic, "The
Usefulness of Competition". Though my article is more specifically
focused on the ethics of business competition, I hope it would somehow
add a little spice in our discussion on Sunday.

Thank you very much.
All the best,
Ruel


------Lawrence


We mainly encounter competition in two contexts: in the biological context of survival, which we would call evolution. And in the economics context as a model of wealth and income distribution. In our daily life we tend to be more conscious of competition in the second type not least because our political masters in the West keep reminding us how good competition is for us.

Evolutionary type of competition is still there working in the background although not many people plan their life around the principles of evolution. Strictly speaking biological competition is not only about the individual survival but more importantly about one's genes surviving into future generations.

On the other hand economic competition is about having more of what we want even though what we want will include needs and to cover the costs of our strategy. However, we are competing with others when our gain is the loss for someone else. This is usually referred to as zero sum game.
There is an important condition here having more does not necessarily mean having more of one thing ad infinitum. We want more of one thing up to the point where we cease to derive any pleasure or need for a particular thing. For example: we don't want more petrol in the car beyond the capacity of the fuel tank.

The competitive strategy is usually employed with companies or the market place as a strategy to distribute limited resources and wealth. Thus our need to consume resources creates wealth for others and vice versa, sometimes. But again companies sell goods usually at the expense of their competitors. If I want a cup of tea then the bar I buy the cup of tea makes a profit at the expense of the bar next to the bar I had my cup of tea.

Thus we find two important features of competition: 1) survival as a function of distribution of resources (or survival ) implies that we have what it takes to participate in the competition strategy (model). If we don’t attract mates and reproduce our genes will not survive into the next generation.
2) Survival in the economic sense implies that at some point my survival as a business will probably affect a competitor. Firstly, because all suppliers cannot supply the same product - people usually want a variety of products to manage their life, thus this probably limits how many suppliers of a thing we need. And secondly, some companies are not as good as others so there will always be instances when it is just not worth going on with the business. Competition makes operations hard for those who function at the threshold of survival.

It is usually argued that the advantages of competition -at least the key ones- in the market place are twofold. The first is that competition leads companies to reduce costs and operate efficiently to make their goods cheaper (or close to value for money) and, therefore, more attractive to buyers and the second is that competition creates choice. As they stand these two principles seem acceptable. 

Moreover, it is also argued that those who do not succeed in meeting the price and choice criteria are doomed to fail.

And to reinforce the value of competition commentators usually compare competition with the planned model economy that tends to operate the wasteful strategy of a monopoly. However, the very same commentators for some reason shy away from comparing competition with the cooperative strategy which in many cases is a far superior model for distributing resources and wealth. Indeed the cooperative model is conspicuous by its absence in the general consciousness of society.
Basically the cooperative model is an attempt to satisfy the needs of the participants of this strategy. We usually understand this model not so much as a compromise from what we want under a competitive model, but now I have to accept something less, but rather the way resources are distributed are based on a model that guarantees the needs of all but still rewards merit. It is not that, under a cooperative system we don't have cars but rather the difference between the advantages of having a car and using public transport are very small. Thus convenience, cost and availability are more or less the same, and the car is available when it is not practical to have public transport. For example, it is not practical to tour the countryside with public transport for leisure, but having an efficient public transport system for people to go to work or shopping even in rural areas makes sense. The cooperative model is also characterised as a win-win strategy.

Of course we cannot have a perfect cooperative model any more than we can have perfect competition. But the idea that if we considered other people in our choices, we would be better off; thus if we used public transport to go to work and the transport company provided a close equivalent to a private car the company would make better operating profits, the cost to use the service can be reduced because of efficiencies in technology and market share, and then there are the consequential benefits on reduced pollution etc. The car can then be used for trips suitable for cars. Indeed we might not want to own a car since it be possible to have more hire car businesses at good prices.
The first philosophical question we can ask about our topic is how practical is competition to be of any use or at least of some use?

But before we can answer this question we first need to find the philosophical flaws of competition; especially economic competition, since economic competition has a direct effect on politics and therefore ethics and morality.

From what I have said so far I want to put forward two propositions.

1) A rational person would favour a competitive strategy if that person honestly believes they will win the competition.

2) A rational person would favour a cooperative strategy if that person honestly believes they will not succeed if they employed a competitive strategy.

These two propositions still maintain the principle that we want to survive and better ourselves but not necessarily using cooperation as a first option. Indeed competition seems to fit our instinct of looking after ourselves first. Whilst cooperation seems to be like a plan B strategy.

A serious philosophical flaw of competition is that despite the barbarity of nature we are still a cooperative society i.e. a social biological system. Indeed, for example for procreation to happen, i.e. pass on genes to the next generation, we need the consent of two people and even if no consent is give nature still needs the cooperation of the individual for the reproduction process to reach a full term.

To answer to my first philosophical question I mentioned above, I will argue, is that the competition model/strategy is practical enough because it is flexible enough to quickly adapt to new circumstances and adopt new solutions. Thus even in a competitive strategy, cooperation is still a valid tactic to win at competition. Hence, we have introduced labour laws and social security as a means for companies and the authorities to get people to cooperate in wealth creation. Indeed, one of the criticisms for having governments provide certain services is not that governments do not necessarily provide good services, but rather governments are not quick and flexible enough in providing the best service when needed.

The second proposition might itself be interpreted as a competitive move to secure survival by using cooperation. Thus, since I cannot win alone I might as well cooperate to have something rather than nothing. The issue I still have here is whether it is possible for an organisation, or even an individual, to be in a position to win a competition alone? I mean is proposition (1) above viable at all or even possible?

I am inclined to argue that in the context of the market place the empirical evidence does not seem to support (1) above for the simple reason that companies engage in a number of extra-operational activities to influence the market place, for example: lobbying governments to favour their industry, organising into associations to promote the interests of the members, pay large salary packaged to smart employees, corruption, creating stumbling blocks for their competitors (e.g. product dumping), price fixing through cartels, exploitation of workers by wilfully creating a large unemployed labour pool etc etc. All these activities do not suggest the actions of someone going it alone, but rather someone trying to perfect the cooperative model to win big.

So, on the one hand we are sold the belief that competition is not only good for us but also very useful. And that competition is so basic that we find it everywhere in nature. However, I have tried to demonstrate and argue that there are, at the very least, some serious flaws about competition that it seems to limit its scope in nature and economics.

There is no doubt that competition, can create efficiencies, reduce the number of weak members of the model and provide some choice. But both in the natural setting and economic setting biological systems and organisations do not survive by competition alone. In nature we survive not only by being stronger, but also not being hit by a falling meteorite, volcano eruptions, infected by a nasty virus, not being hit by a bus and having a good doctor. And as I have argued the same process happens at the company level.

I am inclined to believe that competition has a high impact at the micro level, a sperm reaching an egg first, a lion catching a slow zebra, a coffee shop serving better cups of tea then their neighbour. At the micro level competition has certainly a scope of function and that is as good as being useful. But the higher we go up the macro scale the more we need cooperation: I can bandage a sprained ankle but I certainly need a hospital to fix a broken leg, and hospitals function with teams of carers cooperating with each other and the patient and the rest of society.

I would suggest that the main reason why we abhor the word competition today is because we have mudded the meaning of the word (concept) competition with the concept of greed and avarice. The gap between a legitimate profit and greed is very narrow indeed. What might be dressed as a competitive operation could well be a set up for self enrichment at the expense of others.

Although competition does have some use, what is important for us is that competition is not always bad, and cooperation is not always good! We can compete to make life better for everyone and we can cooperate to make other people's life miserable.

Lawrence




Best Lawrence




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philomadrid@gmail.com <mailto:philomadrid@gmail.com>
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Metro: Bilbao
-----------Ignacio------------
Open Tertulia in English every
From: January 15 at Triskel in c/San Vicente Ferrer 3.
Time: from 19:30 to 21h
http://sites.google.com/site/tertuliainenglishmadrid/
<http://sites.google.com/site/tertuliainenglishmadrid/>
----------------------------



from Lawrence, SUNDAY PhiloMadrid meeting at 6:30pm: How useful is
competition? + News

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